Dimon's pay was slashed even though JPMorgan, the largest
U.S. bank, said fourth-quarter net income jumped 53 percent, and
earnings for 2012 set a record. The fourth-quarter results were
helped by increased mortgage lending profits and a decline in
the costs for bad loans.

The board said the bank's strong results were a key reason
to give Dimon a bonus, but the London trading losses cut into
his compensation.

"As chief executive officer, Mr. Dimon bears ultimate
responsibility for the failures that led to the losses in the
Chief Investment Office," the bank said in a securities filing.

Dimon's pay for 2012 was $11.5 million, the company said in
the filing, including a salary of $1.5 million and a bonus of
$10 million. In 2011 Dimon was paid $23 million, including the
same salary and a bonus of $21.5 million.

Dimon told reporters on a conference call he "respects" the
board's decision.

The trading loss, which was suffered primarily in the second
quarter of 2012, has been a major embarrassment for the company.

It is known for the "London Whale" nickname that hedge fund
traders gave to JPMorgan trader Bruno Iksil, for the large
positions he established from London for the Chief Investment
Office. The trade, made with credit derivatives, became too big
for the company to exit easily.

The report of the bank's management task force, released on
Wednesday, primarily assigns blame for the trading losses to the
failure of three executives beneath Dimon: Ina Drew, the former
chief investment officer; Barry Zubrow, the former risk chief;
and Douglas Braunstein, the former chief financial officer.

Drew failed to properly oversee the trades that led to the
losses, Zubrow failed to properly set up the risk function in
the Chief Investment Office, and Braunstein was responsible for
a weakness in financial controls, the report said.

But Dimon was not without blame either, according to the
task force.

"(He) could have better tested his reliance on what he was
told," the task force said, while also praising him for
responding "forcefully" when he learned of the problem.

While Dimon said Wednesday the Whale position was close to
being a "non-issue" from a trading standpoint, regulators were
still probing what happened. He also acknowledged the trade
caused another modest loss in the fourth quarter, though he
declined to say how much.

Fourth-quarter net income rose to $5.69 billion, or $1.39 a
share, from $3.73 billion, or 90 cents a share, a year earlier.
Results for both periods included special items.

Baird analyst David George said JPMorgan's results should
compare favorably to peers and other brokers. Goldman Sachs
Group Inc, the fifth largest U.S. bank by assets, also
posted stronger profits on Wednesday.

JPMorgan, like Wells Fargo & Co, which is the
nation's largest home lender, has benefited from being a
middleman in the U.S. Federal Reserve's drive to channel
inexpensive money to borrowers to support the housing market and
the economy. Revenue from making home loans has eased the
squeeze on bank profit margins that has come with low interest
rates.

The provision for credit losses plunged 70 percent to $656
million.

"We continued to see favorable credit conditions across our
wholesale loan portfolios and strong credit performance in our
credit card portfolio," Dimon said in a statement.

On a conference call, Dimon said the first quarter of 2013
was "probably okay" for the mortgage business. As the mortgage
refinancing boom runs its course, some worry that lending for
new purchases will not rise fast enough to offset the decline.

JPMorgan shares fell 1.2 percent to $45.80 in early trading.
The stock has more than recovered all of the $26 billion in
market value it lost in the first two weeks after the company
acknowledged the Whale trade. Dimon said share buybacks were
still a good deal at current prices.

"All in, we think it's a good quarter for JPM, and
underscores their solid earnings power," Nomura analyst Glenn
Schorr said in a note to clients. "Solid earnings progression,
capital build & return and reasonable valuation should make '13
another good year in the stock."